TOLEDO, OH-Health Care REIT Inc. said Wednesday it will pay about $1 billion, including the assumption of $314 million in debt, to take a 75% stake in a portfolio of 47 senior housing communities across Canada. Current owner Revera Inc. will continue to manage the $1.35-billion portfolio after the transaction closes.
The Revera portfolio, which will add 5,041 units to HCN's existing holdings in Canada, is located mainly in infill locations within Canada's major metropolitan areas, including Toronto, Vancouver, and Calgary. Nearly two-thirds of the portfolio is located in the country's five largest metro areas, according to a release. Twenty-five of the 47 communities are in Ontario province.
“This acquisition solidifies Health Care REIT as a leading capital provider to the private pay seniors housing industry across Canada,” George Chapman, HCN's chairman and CEO, says in a release. “In partnership with the two leading operators in Canada, we now own more than 13,000 units of private pay seniors housing in Canada.”
Since 2009, Revera has invested about $150 million of capital expenditures into the portfolio, and has agreed to invest the first $50 million of capital expenditures after the deal closes, the release states. The current occupancy level is 89%, entailing an occupancy upside because 14 of the communities are in lease-up.
HCN is projecting a first-year unlevered NOI yield of 7% after paying management fees. The REIT expects that NOI in its partnership with Mississauga, Ont.-based Revera will grow more than 5% in the near term and 4% to 5% over the long term.
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